Growth pains ahead for sustainable finance
A couple of years after the ESG finance boom, financial institutions appear to be taking a step back.
What is driving record ESG fund outflows, and when will sustainable finance become the norm?
As of early September 2023, funds focused on Environmental, Social and Governance (ESG) investment were experiencing their fourth consecutive month of outflows, reaching a total of almost £2 billion of withdrawals. This is a remarkable change of pace, as according to fund network Calastone, before 2023 ESG funds had only seen one month of outflows since 2019. Given that the world needs an estimated US$100 trillion of investment by 2050 to achieve net zero, this change of pace is worrying.
